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Sunday, December 02, 2012

Bush Tax Cut Chart Disproves Obama's Lies

By Susan Duclos

Spending is considered "outlays" and revenue is considered "federal receipts."

Via Reason we see a chart of the federal receipts and the outlays from the last two years of the
Clinton Administration, the two George W. Bush terms and
Barack Obama’s first term. The source for the chart is White House OMB.

A few notes: George W. Bush and supporters of the tax cut said federal
revenue would go up after passing the cuts and it appears it did.
In fact, federal receipts reached Clinton-era levels without
Clinton-era tax rates in 2006, not long after all the cuts went
into effect (passed in 2001 and 2003, they were tweaked with in
2005). Bush passed a tax cut as stimulus in 2008 and Barack Obama’s
trillion dollar stimulus package in 2009 included some type of tax
cuts as well, but does that chart look like a revenue problem or a
spending
problem?

Despite Obama's babbling across the country to push for hiking taxes and his fiscal cliff proposal which includes another $255 billion in stimulus spending aka outlays, the bottom line is that to generate more sustainable revenue we need more taxpayers, more people working so they are paying taxes into the system.

Taxpayers Needed, Not New Taxes

In 2011, Marco Rubio said something that received some attention but then, as happens in politics, was overwhelmed by other arguments in Washington, but his words are more relevant today than they were then.

“We don't need new taxes. We need new taxpayers, people that are
gainfully employed, making money and paying into the tax system. And
then we need a government that has the discipline to take that
additional revenue and use it to pay down the debt and never grow it
again. And that's what we should be focused on, and that's what we're
not focused on.

“So you look at all these taxes that are being proposed, and here's what
I say. I say we should analyze every single one of them through the
lens of job creation, issue number one in America. I want to know which
one of these taxes that they're proposing will create jobs. I want to
know how many jobs are going to be created by the plane tax? How many
jobs are going to be created by the oil company tax that I heard so much
about? How many jobs are created by going after the millionaires and
billionaires the president talks about? I want to know: How many jobs do
they create?

Going back to a couple links I put into a piece on November 30, 2012, showing Barack obama deliberately misleading the American people on who exactly gets caught up in his "tax the rich" death trap.

Obama continues to say his plan to tax the rich would only affect 3 percent of small business owners. What Obama does not mention is he is counting businesses which include marginal and part-time firms with no workers.

Via Washington Post in July 2012, using Department of Treasury data, the percentage of small companies that actually employ workers that would be caught in Obama's tax the rich death trap, is 24 percent.

That 24 percent of business that would be affected, according to the latest research using data from the Federal Reserve Survey of Consumer Finances (SCF), employ 93 percent of the people working in small businesses.

Using Wisconsin business owners as just an example because that is the most recent State survey conducted, we can see the estimated numbers of what is rolling across America's small businesses.

June's 62 percent that were planning to increase their workforce is now
down to 24 percent, a whopping 38 percent decrease. The two percent that
were planning to decrease their workforce is now up to 20 percent, an
18 percent increase.

The economy, regulation, healthcare and taxes, are among the concerns and the reasons cited for the change.

“We’ve got to increase job creation, fast,” he told FOX Business.
“This recession has gone on too long, and now is the time for us to turn
it around by creating certainty.”

As for those looming tax increases for those making above $250,000
annually, Greenblatt said he was going to deliver a message that the
move would stunt economic growth and hiring. American factories, he
said, are one example of a small business that pays taxes on a personal
level of income. Increasing their tax rate will deter potential for
economic gains.

“It makes us less competitive against our economic adversaries like
Canada and Germany,” Greenblatt said. “Right now, American factories are
paying much more in taxes than our German and Canadian rivals. We have
to be more competitive—if we are more competitive, we will win more
jobs… we will hire more locals.”

And if government spending continues on its current path, he said, it is a road to doom.

Spending is America's problem. Raising taxes on 24 percent of employers that are responsible for employing 93 percent of those working in small businesses, will lead to less people employed according to those small business owners, which means less "federal receipts" by way of tax revenue.

According to a study done by
Ernst & Young, in an effort to predict the long-term economic impact
of letting the top rates increase at year’s end, determined the plan
would actually subject 2.1 million business owners to higher rates;
specifically, those who pay pass-through taxes, like most partnerships,
LLCs and S-Corporations. The result, less capital in the hands of
business owners and diminished labor supply, would cost the United
States an estimated $200 billion in economic output and 710,000 jobs. (Source- Washington Post)

Tax Rates for 2012:

10% on taxable income from $0 to $8,700, plus

15% on taxable income over $8,700 to $35,350, plus

25% on taxable income over $35,350 to $85,650, plus

28% on taxable income over $85,650 to $178,650, plus

33% on taxable income over $178,650 to $388,350, plus

35% on taxable income over $388,350.

That would be a loss of 710,000 taxpayers paying revenue into the system, less capital for business owners, less spending into the economy by both those owners and the newly unemployed, plus the unemployment benefits the government would be spending on those new unemployed workers via unemployment checks, medicaid, food stamps etc... all caused by adding a 3-5 percent bump in taxes for the so-called rich. (35 percent paid now, Obama wants 39.6 percent)